Our group has continued studies of chromatin structure and the regulation of eukaryotic gene expression. This year we have made significant progress towards understanding the biiology of ATP-dependent chromatin remodeling by NURF (Nucleosome Remodeling Factor). A previous study from our laboratory reported the isolation of mutants in Nurf301, the gene encoding the only NURF-specific subunit, and demonstration of a requirement for transcription activation of a number of genes in vivo. However, the NURF-dependent genes were limited; furthermore, none of those targets could explain the late larval lethal phenotype. By whole genome expression analysis, we have now uncovered several hundred additional targets, the most striking of which are virtually all members of the ecdysone response genes, key regulators of larval to pupal development (thus accounting for the lethal phenotype). We have gone on to show that NURF interacts genetically with EcR by analysis of dominant negative mutants, and further, that NURF binds physically to EcR in a hormone-dependent manner. These findings indicate that NURF is a major transcriptional coactivator of Ecdysone-response genes, and implicate recruitment by EcR of a wider cast of chromatin modulators. Because EcR is orthologous to mammalian RAR receptors, and NURF is conserved in mammals as well, our findings should have broad implications for steroid hormone signaling.We are also making excellent progress on studies of the SWR1 complex, which is a new member of the SWI2/SNF2 superfamily of chromatin remodeling enzymes. We established a new link between the SWR1 complex and a specific histone variant H2AZ. Histone variant H2AZ is incorporated preferentially at specific locations in eukaryotic chromatin, where it modulates chromosome functions. In S. cerevisiae, deposition of histone H2AZ is mediated by the multi-protein SWR1 complex, which catalyzes ATP-dependent exchange of nucleosomal histone H2A for H2AZ. To elucidate the earliest events in histone exchange, we defined interactions between SWR1 components and H2AZ, revealing a link between the ATPase domain of Swr1 and three subunits required for the binding of H2AZ. We discovered that Swc2, a histone chaperone-like module conserved from yeast to human binds directly to and is essential for transfer of H2AZ. Two components, Swc6 and Arp6, are necessary to tether Swc2 to Swr1, while additional subunits, Swc5 and Yaf9, are required for H2AZ transfer but not H2AZ binding. Finally, the essential C-terminal ?-helix of H2AZ is critical for its recognition by SWR1. These findings provide insight into the first stage of histone variant exchange.